1 Dividend Stock Down 26% to Buy Right Now

This dividend stock may be down by 26%, but it has 100 years of history behind it. So, right now could be the deal of the next century.

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Canadian investors looking for a deal should certainly consider dividend stocks these days. While 2024 is off to a pretty rough start on the markets, this could create opportunities for investors — especially if you have some fixed income added to it.

This is why we’re going to look at a great deal among dividend stocks: Canadian Tire (TSX:CTC.A).

Why Canadian Tire

Canadian Tire stock has had a rough year, despite some strength through the pandemic. The pandemic brought a rise in the company’s ecommerce arm, especially as consumers sought out leisure activities. Yet that all fell dramatically as rising interest rates and higher inflation led to fewer sales.

So, despite managing supply-chain demands, given warehouses are on site, Canadian Tire stock and its other branches all saw a drop. In fact, the company didn’t just lower its goals for 2022 to 2025; it got rid of them altogether, given this economic background.

Since then, there hasn’t been much of an improvement. Sales continue to be down and likely won’t get better until interest rates improve. That being said, is Canadian Tire stock a deal right now? Or is the stock a dud?

Nothing lasts forever

The key here is that Canadian Tire stock is now over 100 years old. It’s also a Dividend Aristocrat, which has increased its dividend year after year for at least five years. And while we might be in some trouble at the moment, that won’t last forever.

In fact, despite getting rid of their goals through to 2025, the company continues to see strong loyalty to the brand. And, in fact, consumers are likely to go back to the company first, given its low cost for leisure items, not to mention its popular automotive department.

Furthermore, there are holiday sales to consider. It’s likely that the company will report strong results given that, again, the low-cost items are likely to be major winners with consumers during the holiday season. All considered, there could be some good news coming the company’s way.

Grab a higher yield today

Sure, Canadian Tire stock is still down by 26%, but that’s not likely to last throughout the rest of 2024. In fact, it could start climbing back up as early as its next earnings report. In the last two months alone, shares are up by 4.5%, and that looks to be edging higher.

Meanwhile, you can pick up Canadian Tire stock with a dividend yield at 4.92% as of writing! That’s while it also trades at a valuable 14.33 times earnings as well. And the dividend looks quite healthy, with a payout ratio of just 69% as of writing.

Right now, Canadian Tire stock looks like a solid deal — especially for investors looking to buy low and hold long term. After all, that’s the best strategy that any of us can take on in this still rough market. So, consider this stock on the TSX today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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